An Optimistic Forecast Business Activity In First Quarter Hits Record, Study Finds

April 28, 1986|By Kenneth Michael of The Sentinel Staff

The Orlando area economy is expected to grow at an annual average rate of 11 percent through the first three months of next year, according to the Business Barometer of Central Florida.

''Thus, Central Florida can look forward to a very good year,'' according to the barometer, in its quarterly issue released today.

The barometer's preliminary index of business activity in Orange, Osceola and Seminole counties reached a record high of 170.2 during the first three months of this year. The index, which uses 1978 as a base of 100, was revised downward to 165.6 for the fourth quarter of 1985 from a preliminary estimate of 176.1

Area business activity grew in the final three months of last year at an annual rate of 11 percent, compared with a 13 percent increase in the previous nine months. The slowdown in the rate of growth ''is characterized as a pause rather than a departure from the pattern of substantial growth for Central Florida, the report said.

The Business Barometer is produced by the economics department of the University of Central Florida and is partially paid for by a grant from Sun Bank, N.A., in Orlando.

''Tourism again leads the way for the rest of the economy in this first part of 1986. On a nonseasonally adjusted basis, all of the measures of tourism . . . were up,'' according to the report. Comparing the first quarter of 1986 with the final three months of 1985, gasoline sales rose 6.23 percent, airport passenger arrivals gained 16.59 percent and hotel room occupancy leaped 51.98 percent.

Of the large jump in hotel occupancy, the report said, ''Not only is it up significantly from the fourth quarter, which is expected on historical grounds, but it is up by more than 33 percent over the same period last year.'' It cited increased advertising campaigns by Walt Disney World and Sea World in the primary market area and the addition of attractions at each entertainment park. Other factors seen as playing a major role in increased tourism are lower gasoline prices, the decline in the value of the dollar and fears of terrorism abroad.

While business activity increased at a good

pace in the first three months of 1986, consumers' confidence in the Central Florida economy soared. Using the first quarter of 1980 as a base of 100, the area's consumer confidence leaped 22.5 percent to 291.1 during March. Meanwhile, the nationwide index of consumer confidence, as measured by the The Conference Board, slid from 190 at the beginning of 1985 to slightly more than 180 last month.

But the confidence of Central Florida businessmen in the economic future declined slightly. Of 200 businessmen surveyed last month, 48 percent said business was better over the last six months, compared with 37 percent who gave a favorable response three months ago. But 52 percent of the local businessmen said they thought conditions would improve over the next six months, down from 57 percent in the December survey.

The Business Barometer said, ''Local economic indicators show that nearly all sectors of the economy will participate in a year of strong performance. Exceptions to this generally optimistic picture are manufacturing and agriculture.''

The forecast said total employment should grow in the three-county area by 6.9 percent to 523,000 jobholders and projected that the largest growth area will be in hotel room occupancy, with an annual average increase of 23.75 percent. The commercial bank index, which measures the ratio of loans to deposits, is expected to increase an average of 12 percent.

The barometer said other segments of the economy that are expected to grow in the next 12 months are: gasoline sales, 5.43 percent; international airport passenger arrivals, 6.24 percent; value of gross retail sales, 6.91 percent; value of building permits, 1.86 percent, and the number of additional residential electric meters, 5.12 percent.

The use of industrial electric kilowatt hours, which is the best indicator of manufacturing activity, is projected to drop an average of 1.78 percent into the spring of 1987, while the dollar volume in sales of agriculutral products in Central Florida is expected to decline 11.26 percent. The agricultural decline has been brought about by a combination of urban sprawl and by the decimation of the Central Florida citrus industry as a result of freezes in recent years.